Leadership Series

Looking Backward and Forward at Dividend Growth

Emma Baumgartner  | Mega Cap Research Analyst Scott Offen  | Portfolio Manager Naveed Rahman  | Institutional Portfolio Manager
September 2012 

Three investment professionals compare the effectiveness of forward- and backward-looking approaches to equity income investing in this investment insights piece. Equity portfolios constructed from backward-looking combinations of income-oriented and valuation factors have performed well historically, yet there are pitfalls to this approach, the piece notes. An active, forward-looking approach not only helps investors avoid the risk of the dividend cut, but also holds the promise of forecasting positive dividend growth. Even without perfect foresight, investors who take an active approach to anticipating dividend growth may be able to reduce the risks and enhance the benefits of equity income.

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